No matter how the capital market fluctuates, the global real economy is really ushering in a broad and profound energy revolution and a big wave of scientific and technological revolution, which will bring great opportunities for a generation, and we must not ignore the influence of these two revolutions.
1. The "second half of the energy revolution" marked by "comprehensive photovoltaic storage parity" and "comprehensive electrification" has embarked on a grand journey
Energy is the blood of the economy and society, and every energy revolution has promoted the great progress of human society. After the second industrial revolution in the 60s of the 19th century, mankind has entered the "era of electrification", and the power system has undergone hundreds of years of continuous construction around the world, and is one of the largest and most complex systems built by mankind so far, and it is also the core system of the global energy system.
The new energy revolution has been vigorously carried out for more than 10 years, the past 10 years is the development of photovoltaic and electric vehicles as the main theme of the "first half of the energy revolution", the new energy industry after more than 10 years of technological progress, cost reduction, policy improvement, has completed the power generation end of "photovoltaic parity", the power side of the "electricity than oil" (refers to the price of electric vehicles lower than the oil car) two historical, revolutionary breakthroughs.
At present, we have officially entered the "second half of the energy revolution", that is, the power generation side must achieve "comprehensive photovoltaic storage parity", and the power consumption end must achieve "full electric intelligence" (not only passenger cars, but also heavy trucks, construction machinery, ships, and even airplanes, etc.), the revolutionary task is more arduous, but the long-term vision is also more ambitious. Since 2023, due to cyclical and phased oversupply, the price of photovoltaic modules and lithium batteries has dropped by more than 50% from the high, and the price has hit a record low, while the efficiency of photovoltaic products and the number of cycles of energy storage batteries are still continuing to improve rapidly, but the global energy prices of electricity, coal, and oil are still at a high level. The economy of new energy products such as electric excavators and electric ships has been greatly improved, and the "Cambrian" era of "electrification of everything" has arrived, and many previously unimagined fields are expected to enter the stage of "explosion of electrified species".
In 2022, optical storage only ignited the "spark" of "emerging photovoltaic storage parity" in the European household storage scene, and the product price was still at a high level at that time; In 2023, "shallow PV storage parity" will be further realized, that is, there are only a small number of PV places in the world with a small amount of energy storage to meet the investment economy, for example, only some regions in China can achieve grid parity with a PV distribution and energy storage ratio of about 1:0.2; Entering 2024, due to the sharp price reduction of products, "deep photovoltaic storage parity" has been realized, and many places in the world have photovoltaic with a higher proportion of energy storage to meet the investment economy, for example, China has many regions that can achieve the ratio of photovoltaic distribution and energy storage to the grid at about 1:2, and the vast majority of the world's rooftop photovoltaic has good economy. In the next few years, as the photovoltaic storage technology continues to progress and the cost continues to decline, it is expected to achieve "comprehensive photovoltaic storage parity", and all places in the world are expected to meet the ratio of photovoltaic distribution and energy storage to the grid at a ratio of 1:4 or even a higher proportion, and all the electricity generated by photovoltaic every day can be stored by energy storage, which will not have an impact on the power grid at all, and the intermittency of photovoltaic power generation and power grid consumption will be greatly solved, thereby greatly opening the ceiling of photovoltaic and energy storage demand space and accelerating the arrival of the era of carbon neutrality.
With the re-outbreak of total demand in the second half of the future energy revolution, it is also expected that a large number of links with faster structural growth and technological updates will emerge, such as new photovoltaic technologies such as electroplating copper and perovskite, new lithium battery technologies such as skateboard chassis, fast charging, condensed matter, and solid-state batteries, and smart grid links such as grid-based power electronic equipment, smart microgrids, and UHV. On the road to carbon neutrality in the future, we still have a lot of industrial progress worth looking forward to, such as super fast charging may be faster than refueling in the future, the standard improvement, differentiation and barriers of energy storage systems will become more and more obvious in the future, and the future of electric ships and electric aircraft will give rise to a large number of high-performance, high-barrier, high-profit battery demand and so on.
We believe that the demand space in the second half of the new energy revolution is still very huge, especially in the direction of energy storage, photovoltaic new technology, lithium battery new technology, smart grid and other directions, and the global competitive advantage of Chinese enterprises in these fields is very prominent. After decades of hard work, China's photovoltaic, lithium battery, new energy vehicle industry in the turmoil from scratch, from there to large, from large to strong, has firmly established the absolute leading position in the world, the future of China's energy storage, smart vehicles, smart grid and other new energy industries are also likely to occupy the global leading position, and then lead the cause of carbon neutrality of all mankind.
Second, a new round of scientific and technological revolution with AI as the core presses the accelerator button, and there is no end in sight for a while
Science and technology are the primary productive forces, and 2023 is a very important year in the history of human scientific and technological revolution. Artificial intelligence (AI), humanoid robots, autonomous driving, virtual reality (MR), brain-computer interfaces, satellite Internet and other revolutionary technologies that change the future and destiny of mankind have all pressed the accelerator button, and promoted each other, and continued rapid nonlinear evolution, which is expected to detonate the productivity revolution and cognitive revolution of all mankind.
The emergence of ChatGPT in 2023 has opened a new round of generative AI revolution and detonated a big discussion about the future of AI. Generative AI has just appeared, and it has already promoted a substantial increase in productivity in industries such as programming, media, advertising, and e-commerce. As for the future of AI? I agree with the famous AI scientist Li Feifei, who believes that we are in the "pre-Newton" era of AI, and in the past, before Newton discovered the laws of mechanics, people only saw the phenomenon that "the greater the force of the horse-drawn cart, the faster it will move forward", but they did not know the physics behind it. Now, we only see the "Scaling Law" phenomenon that the larger the data and parameters of the model, the better the model's capabilities, but we don't know the basic principle behind it. However, many top teams in the industry have regarded "Scaling Law" as the "first principle" of AI, and have made more and more unexpected progress along the path of "bigger is better", resulting in a lot of demand for computing power, talents, capital, and even electricity, metals, etc., and these massive demands seem to be accelerating, with no end in sight.
In addition to the amazing new developments in the field of AI, in 2024, we are also expected to see the first implementation of autonomous driving in the true sense of the word in China and the United States, the emergence of explosive applications of virtual reality, and the application of humanoid robots in factory production...... The spark of these emerging scientific and technological revolution is expected to set off a prairie fire in the next decade, people are often prone to overestimate the fluctuations of a year due to new things, and underestimate the general trend of ten years, just as no professional institutions dared to predict that the new installed capacity of photovoltaic in a single year may reach 1000GW ten years ago, you must know that in 2014, the global new photovoltaic installed capacity is only about 40GW, and the development of various industries in this round of scientific and technological revolution is likely to greatly exceed the linear prediction of some professional institutions.
3. How to grasp the investment opportunities of the energy revolution and the scientific and technological revolution?
The energy revolution and the scientific and technological revolution are the opportunities of the times of the industry, but also the opportunities of the times of investment, the two revolutions involve a large scale of industries, many subdivisions, and a large time and space span, and it is expected that a number of high-quality companies with long-term and substantial growth in performance will emerge.
The report of the 20th National Congress of the Communist Party of China pointed out: "At present, the world is undergoing major changes unseen in a century, a new round of scientific and technological revolution and industrial transformation is developing in depth, the international balance of power is being profoundly adjusted, and the development of the mainland is facing new strategic opportunities. At the same time, the impact of the pandemic of the century is far-reaching, the trend of anti-globalization is on the rise, unilateralism and protectionism are on the rise, the world economic recovery is sluggish, local conflicts and turmoil are frequent, global problems are intensifying, and the world has entered a new period of turbulence and change." Companies investing in emerging industries should not only look at the broad growth space, but also pay special attention to the quality, cycle, sustainability and valuation level of growth.
From a historical point of view, it is difficult for a single subdivision of emerging industry sectors to continue to hit new highs in the stock market for a long time, because each industry has a life cycle, and the texture differentiation between different companies in the same industrial chain is also very large, the later the industry, the greater the differentiation of each company, and the companies that really have the ability to continue to grow, long-term competitive advantage and value creation are very scarce in the long run, and most companies may be short-lived "pseudo-growth stocks", which is also destined to the so-called "single subdivision track investment" is difficult to have lasting vitality. Taking history as a mirror, consumer electronics, Internet, photovoltaics, electric vehicles and other industries were once emerging growth industries with rapid growth in different eras, but there are very few companies with high long-term returns in each sub-industry, so the adjustment of each sector index in the downward stage of the industrial cycle is more drastic, because it contains a lot of pseudo-growth stocks with low quality.
Fortunately, we are in a new round of energy revolution and the golden age of the technological revolution in the ascendant, and there are enough emerging growth industries in the world for us to continue to explore long-term investment opportunities, including but not limited to: energy storage in the field of energy revolution, new photovoltaic technology, lithium battery technology, smart grid and other directions, and artificial intelligence, intelligent driving, robotics, virtual reality, brain-computer interface, low-altitude economy, satellite Internet and other directions in the field of scientific and technological revolution. Therefore, we do not have to stick to the tip of the horns of "drilling" into a certain "strongest" subdivision track, but hope to calmly look at some emerging industries, strictly select a small number of high-quality companies in these industries with sustainable growth ability, long-term competitive advantage, value creation ability, and reasonable valuation level, and invest in the medium and long-term layout by selecting real growth stocks of multiple emerging industries, and enjoy the "multiple strong beta× select strong alpha" growth dividends of multiple emerging industries, and avoid focusing on betting on a single subdivision track. A single strong beta × a lot of negative alpha" risk, and the end result is a desire to achieve long-term sustainable alpha in the form of a selection of "a small amount of real growth from multiple good tracks", which may be a desirable way to invest in the two revolutions.
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